Simmel's Philosophy of Money

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SIMMEL'S PHILOSOPHY OF MONEY.

" The difference between persons is not in wisdom, but in art." — Emerson.

Immeasurable are the eternal hunting-grounds of knowledge,
and innumerable the hunters who go out hunting for knowledge
and truth ; but very narrow is the hunting-ground of the isolated
individual in this our epoch of microscopic investigation. Only
rarely, very rarely, such a truth-seeker exceeds the narrow dis-
trict which belongs to him, and to him alone, in order to see
more than this small world of his. It is the fate of the philoso-
phy of our time to become thus narrowed. The high-flying
thoughts which embraced the universe have been displaced by
the "only saving" experiment by which we have learned a great
deal, it is true, but behind which the great question mark still
remains and which, though it provides us with the elements,
never unveils the last cause.

If in this our time we come upon a book that shows nothing
of the spirit of caste in philosophy, but tries to be nothing else
than a philosophical image of the world as it is seen by an indi-
vidual eye, this fact alone is sufficient to attract our attention.
We are not rich in philosophical minds ; only a small number of
those who teach philosophy at the universities can lay claim to
this title of honor. Men like Mack or Dilthcy, Wundt or
Spencer, belong to their number; of the younger philosophers,
certainly Georg Simmel. His work, of which we are going to
speak here, the Philosophy of Money? is so absolutely an image of
his personality that we cannot forbear to consider the tempera-
ment through which he saw a fragment, or more than a fragment,
of life.

Nervous to the fingertips, of the almost frightening sensibility
of the neurasthenic, Simmel is one of the most ingenious inter-
preters of psychic emotions, incomparable in the gift to feel the
most subtle vibrations of the soul.

What we admire most in him is the contradiction or rather

1 Leipzig : Duncker & Humblot.

46

SIMM EL'S PHILOSOPHY OF MONEY 47

coincidence, in his character, of the highest faculty of ana-
lytical thought with the gift of artistic representation ; the
perfect harmony between analysis and synthesis, between scien-
tific abstraction and emotional contemplation. In his Introduc-
tion to Moral Science? which investigates the; principles of ethics,
as well as in his Social Differentiation, 2 Simmel has already touched
problems which, lying at a great distance from the broad way of
university science, are darkly looming from out the multitude of
social psychological questions ; and here already he has brought
light into many a dark corner of the science of sociology. The
Philosophy of Money, which in many ways excels his former works,
is the keystone of his*social psychological investigations and a
document of the relative interpretation of life which may be
called Simmel 's particular Weltanschauung.

In this book the attempt has been made to single out one
particular question from the multitude of problems and to show
the totality of its meaning in the singular phenomenon by fol-
lowing the chain of ideas which, beyond any merely historical
evolution of its substance, leads far beyond the merely accidental
historical realization. Analysis and synthesis are necessary com-
plements to each other, and Simmel does justice to the totality
which lies in their union in treating the problem analytically and
synthetically, and in exceeding mere representation.

In artistic symmetry the analytical and the synthetical part
are standing side by side. The former is divided into the fol-
lowing chapters : "Value and Money;" "The Substance- Value
of Money;" "Money in the Succession of Purposes (Zweck-
rei/ien);" the latter, into the chapters "Individual Liberty,"
"The Money Equivalent of Personal Values," and "The Style of
Life."

It is impossible to treat critically the contents of the whole
work of nearly 600 pages, though it is difficult to pass by so
much beauty and so many new thoughts. We can only get a
glimpse of a few points. In contrast to other authors, I should
like to lay stress on the first analytical part, as I consider it
to be fundamental. It develops money from life, the synthetical

"Berlin, 1892, 1893; two volumes. 'Leipzig, 1890.

48 THE AMERICAN JOURNAL OF SOCIOLOGY

part of life from money. If in the introduction to the work
Simmel says that not a single line of the whole book should be
interpreted economically, this can only mean that it should not
be interpreted merely economically. And the real meaning of it
is the same as is incorporated in the fact that the system exceeds
the singular phenomenon and belongs rather to the kingdom of
ideas than to everyday realities.

From a higher standpoint the author looks down upon the
market-place of life, the comings and goings of which seem so
intricate, where people seem to be jumbled up, and where you
look in vain for the Archimedean point from which the earth
cannot be moved out of its poles, it is true — that peaceful science
will not do — but from which it can be overlooked at a glance.
The world as the great market-place, taken from a bird's-eye
view, from which everything is seen in relation to everything
else — that is the view that Simmel shows us in his Philosophy
of Money. Only an economic phenomenon like money, and this
before all others, could in its totality give an image of the world
in which everything is part of the whole. In his book Simmel
gives the philosophic limits of any science, its premises on the
one and its last consequences on the other side. The pre- and
post-economic side of money is treated; the author speaks of
money, but through it he lets us see mankind and life.

In his first chapter, "Value and Money," Simmel opposes
being to value, reality of being to valuing as categories. This
is a hypothesis which differentiates reality as it indifferently fol-
lows natural laws from any individually formed range of values.
In the world of realities — the subjectivity of which in a philo-
sophic sense need not be entered upon here — our ego is nothing
but an atom ; in the world of values we are masters and creators.
Nature does not care for what we care for ; she destroys what
seemed to be made for eternity and conserves what seems
doomed to destruction. No determination regulates the relation
between reality and value ; similar to parallels they run side by
side, and the synthesis that embraces both lies only where both
lines meet — in infinity.

Whether this principal difference is as great as Simmel sees

SIMMEL'S PHILOSOPHY OF MONEY 49

it may be doubted from the point of view that reality also as
such can be perceived in certain psychological orders, which are
regulated by the same laws as valuing. It may be shortly shown
what Simmel means by subjectivity of value. The phenomenon
that one and the same object is valued differently by different
persons, and, on the other hand, that difference of objects need
not mean difference of value, makes the valuing subject a
responsible instance, whose different relations must be regarded
as causes. The subjectivity and objectivity of value — the bone
of contention in economic science from the beginning of scien-
tific investigation up to the psychologically exact deductions of
the Austrian theorists of marginal utility — are here investigated
from quite new points of view. We meet with the riddle of
value on a philosophic foundation, as we want it so badly for
the purposes of economic theory. But has the riddle been
solved? I hardly believe it. New sparkling surfaces have been
cut on the crystal, but it has not yet become transparent. We
have become a good deal richer in knowledge of psychological
truths, but. even they leave many contradictions in life still
unsolved. The investigations into the subjectivity of value show
us that value can never be attributed to an object from arbitrary
reasons ; its foundation is rather the negative one : that value or
valuing cannot cling to things like color or scent ; the subjec-
tivity of value is only our copying of an objective determination.
Thus value must belong to a category in which objectivity also
lays claim to being acknowledged. Subjectivity and objec-
tivity may be only stages, may exist one by the side of the
other, the locus of value. And that is of highest importance, as
subjectivity and objectivity have no right to take up the whole
sum of existence — must belong to a category which makes allow-
ance as well for our feelings as for the structure of reality, and
which may be named the supersubjective one. Psychologically
objective value is really very closely connected with subjective
value. As objective value in the abstract it may be considered
as the norm of subjective value, built up on the human faculty to
quasi-objectify emotional quantities. What Simmel develops is
an eclectic combination of the theories of value of the Austrian

50 THE AMERICAN JOURNAL OF SOCIOLOGY

school of Marx, Carey, and Duhring, who all of them have done
justice to only one side of valuing, and some of whom overrate
the side of supply and some the side of demand. Simmel's
theory of value is a theory of sacrifice. But he does not char-
acterize the sacrifice or the cost as value, but as the elements
which form value. As long as an object comes to us without
painstaking it is worthless, like water at the source and the air
we breathe. Only the distance that stands between our desires
and their fulfilment makes us project the intensity of our need
on to the object ; only the dissolution from its merely being
enjoyed makes the object an object of value. When a Volks-
wirtschaft develops, it seems as if the objects determined their
own value, by being exchanged, while in reality the subjective
satisfaction of needs is the basis for this valuation. The distance
between subjects and objects, produced by difficulties of acquisi-
tion, i. e., rarity, by the necessary division in different possibilities
of employment, by all sorts of obstacles, only this gives value to
things. But Simmel does not make the mistake of earlier
economists, as he does not pretend the force of resistance to be
proportional to value. Has the distance between subjects and
objects once become a fact, it takes the technical form of an
exchange, this being the only possibility that objects determine
each other's values. The tendency toward an objectivation of
values, toward a mere mechanization of economics, never comes
to an end. As exchange is of importance to the whole of society,
by being exchanged an object becomes an object of value. The
sacrifice, the being obliged to give one thing for another, creates
values. Exchange is only one out of the multitude of relations
of which life consists and which manifest themselves in every
love, in every friendship.

The objection that the isolated householder, who neither
buys nor sells, and economic periods before the development of
exchange, cannot know valuation if it is exchange which forms
value, is subtly confuted by Simmel. According to him the
essential characteristic of exchange consists only in the fact that
a subject now possesses something which formerly it did not
possess, and does not possess something which formerly it did

SIMMEL' S PHILOSOPHY OF MONEY 51

possess. The interindividual exchange is only a doubling of this
relation. The main point, however, is the process going on in
the individual man. The isolated householder also makes valu-
ations when he confides the seed to the soil, and it does not
matter that not a subject, but the natural order of things — which
demands a sacrifice in order that our needs may be satisfied —
is his partner. This is really nothing else than an exchange, for
temporary coincidence of action and reaction is not essential to
it. We are of the same opinion as Simmel, that exchange or
trade is just as productive as the production properly so called,
as we cannot create either substances or energies, but can only
combine and shift given ones in such a way that as many as
possible of "realities" become "values." 1

From the point of view of political economy we have here
nothing else than a highly developed theory of sacrifice. Only
the ideas that Simmel attaches to the problem of value give a
new significance to the theory. One formula only has been
taken up, but out of it we can develop the formulae for the world.
"To be after" means "to be in relation." Exchange is one
of the highest forms of being, the special image of relativity,
which to Simmel becomes the symbol of the world. The fact
that things are determined one by the other is the basis of
human realities. Economics is because there are values, but
values are only because economics is. When we have grasped
this interpretation, we understand the sentence which in its
form is analogous to Kant: "The possibility of economics is
at the same time the possibility of the objects of economics."
In this theory " rarity " and "usefulness" can be included, but
they alone cannot create values ; only the relation to a purpose,
which exchange, as the overcoming of any felt dependence,
creates — only the addition of the human will, not this depend-
ence alone — is able to create values. As soon as we become
aware of the fact that each value is not value in the abstract, but
special value, we understand the coincidence of price and value.
Yea, value is only the epigone of price, while it seems to us as if
we pay a price for that which is valuable. The reason of this is

z Vide J. B. Say, Traiti d'iconomie politique, Vol. I, chap. 4.

52 THE AMERICAN JOURNAL OF SOCIOLOGY

the fact that only our power to change the actual situation by
sacrificing labor or goods — i. e., exchange — creates values.

The third part of this chapter discusses in general how things
are determined by each other. It investigates the problem of
truth, knowledge as a whole in the flow of relativity, the whole
being less true than its parts. Every perception, every institu-
tion, only finds its sense in other things ; that is so with regard
to law, the basis of which is not absolute justice, and with regard
to art, the truth of which is the most perspicuous image of rela-
tivity. We understand our ego through other people and other
people through our ego. The highest condensation of this rela-
tivity is money, " for in it the value of things, looked upon as
their economic reaction on one another, has found its clearest
expression." Money is the objectivation of the relation which
as exchangeability plays a part in economics, but beyond that it
is the expression for the formula that things are determined by
each other, that only the mutuality of relations determines their
being, and their being as they are. Thus money becomes sepa-
rated from all other goods, and on it as onto sacred objects
we project the relations as the symbol of which they afterward
appear. Money as the symbol of relativity — or, better, exchange-
ability — begins to be more and more nothing but a symbol.

The second chapter, "The Substance-Value of Money," 1 treats
of a problem of special interest to every economist — the question
whether it is necessary that the substance of money should be
valuable in order to make money fit for the fulfilment of its
function. Much thought has been given to this problem. From
Aristotle upward, all through the Middle Ages, by French,
English, and Italian philosophers of the eighteenth century ; by
the classical school of political economy, by bimetallists and
anti-bimetallists — by all of these has the problem been touched, 2
by none of them has it been solved. As far as I can look over
the literature, there exists no investigation which looks upon the
question from a purely logical point of view and totally inde-

*Cf. Tonnies, Gemeinschaft und Gesellschaft, Leipzig, 1887.

"Vide, among others, Aristot., Pol. (I, 3, 16 Schr.) ; Melancthon, Coop. Re/.,
XVI, 498 ; Montanari, Delia Moneta, 35 ; B. Franklin, Remarks on the American
Paper Money, 1765; Ricardo, Proposal for an Economical and Secure Currency;
KOSCHER, Grundlagen der Nationalbkonomie, § 116 ; Knies, Das Geld, 1885.

SIMMEL'S PHILOSOPHY OP MONEY 53

pendent from the historical realization of economics. Simmel
is the first who undertakes to interpret the idea of valuation
purely deductively. Certainly there exists an idea of money, as
there exist natural laws, and the money that serves for economic
transactions is only a manifestation of its meaning, as the single
experiment is the manifestation of the natural law. But as the
law of gravity does not become evident in reality, but only
manifests itself in vacuo thus, we may not consider our money,
as far as it serves economic purposes, as the manifestation of its
pure meaning; but what we call money is, as it seems to me,
only a substitute for money, the historical tendency of which is
to accept more and more of that which constitutes the meaning
of money and to remove what is opposed to it.

The question whether it is necessary for money to be valu-
able in substance in order to measure values — that is to say,
whether there must exist an equality of quality between the
measuring and the measured object x — is not as easily answered in
the affirmative as it seems at first sight. Only to the superficial
observer it seems as if money should necessarily be valuable,
as it is necessary for the instrument for measuring lengths to be
long and for the weight to be heavy. Price as the expression for
money, and goods, does not stand in this simple relation to each
other; among others it is Philippovich who made this quite
clear. The idea into which Simmel enters at length, without,
however, being able to come to the last solution, is the attempt
to do away with the simple comparison between goods and their
prices which by nature have no qualitative relation to each other
and to put in its stead the relation of two proportions in which
the dependence of the formation of prices from the whole of eco-
nomics is expressed. Doubtless the total quantity of money =
M, and the total quantity of goods = G, stand in a certain rela-
tion to each other — a fact which is clearly shown by the influ-
ence an increase of the sum of goods has upon prices. 2 Just so,

1 Vide Law, Money and Trade, considered with a proposal for supplying the
nation with money; Roscher, Grundlagen der Nationalbkonomie, 1900, p. 340;
Mommsen, Geschichte des rbmischen Munzwesens (i860), p. yi.

» Traces of this are already to be found in Locke, Hume, Montesquieu, and all
theorists of quantity.

54 THE AMERICAN JOURNAL OF SOCIOLOGY

every single quantity of goods must at a given moment be in
some way related to the total quantity of goods. The just price
for any good, which by itself could never be recognized, would
be that given by this relation. If we take m to be the single
sum of money and g the single good, we can form the equation

g m

G~~M
Thus we get an objective proportion which takes the place of the
absent qualitative relation. By the introduction of the mathemat-
ical functional symbol which serves to represent the actual forma-
tion of price the equation becomes applicable to every case and

or fpi

remains mathematically just ; i.e.,-z=r=—jg.. The difficulty that

none of us, not even the most theoretical of economists, in
paying a certain price ever thinks of the total quantity of
money or goods is very cleverly overcome by Simmel. The
two denominators vanish from our consciousness, the narrowness
of which leaves room but for the concrete individual case ; thus
only the numerators of the fraction — good and price — appear to
us to be effective, while the total quantities of both remain outside
our consciousness. The reason why this measuring function of
money is so difficult to recognize and is denied by so many lies
in the fact that historical realization has left a double character
in money, that, besides its value as gold or silver it has its value
as a function. While former theorists recognized only a tend-
ency toward a development of the functional character and a
recession of the substance character, Simmel considers the func-
tion, not the substance, to be essential to money, and goes so far
as to call its substantial character a detriment to pure money.
The evolution of money must have the tendency to give up sub-
stance more and more, 1 but from technical reasons this can per-
haps never be anything more than a regulative principle, the end
of which may never be reached.

Money as well as every other economic phenomenon is
regulated by the economic principle, the principle of economy
and construction of energy and substance. More and more

1 Vide Von Scheet, " Der Begriff des Geldes in seiner historisch-okonomischen
Entwicklung," in Hildebrand's Jahrbiicher (1866), Vol. I, p. 16.

SIMM EL 'S PHILOS OPHY OF MONEY $ 5

money becomes a symbol and loses the character of a mere
substance ; this is illustrated by an abundance of deep psycho-
logical examples and analogies, till at last we come to the con-
clusion that at the beginning money is made fit for its function
because it has value, but that in the end it has a value only
because of its function.

The third chapter treats of " Money in the Succession of
Purposes," it proclaims money to incorporate the purest idea of
a mean entering into all purposes merely as an instrument.
Totally indifferent, money stands above all objects, and because
it has no purpose it is everywhere means. The character of
money is its want of character, which lets it play its part in
relation to everything merely in order to fulfil its purposes.
Especially dear and perspicuous seems to me the representation
of the dependence and connection between value and purpose.
We see that from a psychological point of view we can even
identify the two. Purpose — as valuable ' in itself — projects its
value on the mean that leads to it, just as we confer the impor-
tance of the satisfaction of a need from the subject to the satisfy-
ing object. In an absolute sense a value or a purpose is always
in existence when a process of will stops. Value and purpose
are only two sides of a phenomenon, the idea of an object which
in its theoretical emotional significance is a value in its practical
volitive significance becomes a purpose. It is impossible to
overrate the importance of this teleological view. For it has
been truly said that thinking, feeling, and will cannot be separated,
but are three inseparable elements in the stream of conscious life.
What I have just felt or imagined as a value becomes afterward
as a purpose the motive of my action.

But money also ceases to be merely a means and degenerates
into a purpose. This dislocation of means and end is illustrated
by the problems of avarice, of ascetic poverty, and of cynicism.

In the following part Simmel shows how a quantity of money
can become of qualitative significance. Here he investigates the
problem of the household of economic consciousness, a thresh-
old of quantity the height of which designates our scale in the
estimation of economic, or better money, questions. It is a very

56 THE AMERICAN JOURNAL OF SOCIOLOGY

good idea of Simmel's to assume such thresholds, not for con-
sciousness only, as is generally done, but for the different
provinces of emotion and intellect, to speak of an aesthetic, of
an economic, of a philosophic threshold. In this case, however,
he enters only into the economic side. It is essential to money
that by raising its quantity its quality also is changed. A large
sum in one hand has a different effect from what it would have
in many hands. Thus money becomes the symbol of a general
tendency in life — namely, the reduction of quality to quantity.
If money has thus grown from out of the structure of the
human soul and of human society, it has, on the other hand,
reacted upon both.

It was the object of the analytic part of the work to dissect;
it is the the object of the synthetic part to build up. This leads
up to the chapter on "Individual Liberty." There can be no
higher task than to recognize the blessings that civilization has
brought to mankind; no more tempting one than to investigate
the effect that one of its most important instruments — money —
has had upon individual liberty. We can follow the process all
through history, how money releases the person because the
obligation is related to the product of work, not to the human
being. Money is able to form the most impersonal relations
between men. The objective bond grows, but personal liberty
remains. Object and subject are separated from each other.
The bonds that money creates between men are infinitely
numerous; nearly all relations between men have some connec-
tion with money, may it be ever so insignificant, as for instance,
the rent a society has to pay for a room. But only the objective
purport connects men; personally they remain free, even if the
number of people upon whom they are dependent grows more
and more. Just because there is the possibility of the most
impersonal relations, there is room for individual liberty.

Money transforms property. While the possession of goods
affects the individual because the peculiarities of different objects
require different ambitions, the infinite number of possibilities that
money combines leaves us free. Money is, so to speak, condensed
property, the possesion of which contains the possession of every-

SIMMEVS PHILOSOPHY OF MONEY 57

thing we can buy for money. 1 The significance of the posses-
sion of money does not lie in the object, but in its relation to the
subject, the possessor, who can use it according to his wishes.
The greater and higher the part that money plays in economics,
the looser become the bands between people, because money is
the absolute means. It is impossible to repeat here all the subtle
remarks Simmel makes on the different kinds of property,
on the character of exchange as the center of all monetary
transactions; this must be read and enjoyed in its proper place.
Also with regard to space, money loosens the bond between us
and property. Only by money the shareholder, the public credit-
or, the landed proprietor who has let his farm, are enabled to
live at a distance from their property, as this can be secured by
money.

One remainder of the period of closer personal bonds is still
to be found in our modern times — the relation of the servant to
the master. Servants enter into this relation as whole persons,
as they have not been hired for a special purpose. The labor
movement would never have been able to become so powerful, if
the contract between employers and employed did not bind the
laborer to a special purpose only, and with his personal liberty
did not leave him a good deal of self-esteem. The relation
between servant and master, which is determined by the fact that
the greater part of the wages is still paid in kind, has not yet
reached the technical character which it is the tendency of all
other relations between men to strive after.

Simmers remarks on socialism will hardly be applauded by
its followers. Schmoller justly supposes they will think him too
much of an aristocrat. Simmel has learned a great deal from
Marx, but neither in his theory of value, nor in psychological
and ethical questions has he stopped there. For that reason the
attacks one of the most talented of our younger socialists made
against his book, which does not at all intend to give anything
but a theory of value, seem to me one-sided and unjust. But
this only by the way. There are very many subtle and clever

1 This is already expressed by the ancient sentence: "Pecuniam habens, habet
omnem rem quam habere vult."

58 THE AMERICAN JOURNAL OF SOCIOLOGY

thoughts just in this part of the book, as for instance, the idea
of the connection between the growing importance of money and
individualism. Money widens the circles, because the individual
enters into every relation with part of its ego only ; it leaves room
for a greater individualization. Closer bonds presume equality;
they check the process of individualization. Very obvious seems
to me the truth of the argument that if we look upon socialism
as a rationalization of society, the peasant must be farther
removed from it than the industrial laborer, because his labor is
less regulated than any work dependent upon machines.

In the following chapter, " The Money Equivalent of Personal
Values," we are led into the region of historical facts in their
psychological relation to money. Money and man, the highest
created being and the most impersonal of objects, are put into a
relation, a comparison; the value of the man becomes measur-
able by money. The fact, so repellent to any more delicate feel-
ing, that the totality of man is prized by money, is illustrated by
three of its most interesting forms — by blood-money, slavery,
and marriage by purchase. Many a light is thrown on the vary-
ing conceptions of man and of the human soul it was left to
Christianity to represent as something absolutely valuable. The
double sense and origin of punishment — from society's need of
protection and as a compensation for damages done — is clearly
shown. Also our modern system of law is drawn into the range
of the investigation, a system in which all crimes reducible to
money-interests have to suffer much higher penalties than
others the impunity of which is directly opposed to our ideas
of justice.

The tendency of money to strive after ever-growing indiffer-
ence and mere quantitative significance coincides with the ever-
growing differentiation of men which individualizes them more
and more ; and thus money becomes less and less inadequate to
personal values in man. An important part money plays in the
purchase of women, which cannot be said to have anything dis-
honoring in a lower state of society, but rather denotes a rising
from sexual relations akin to promiscuity — the pure existence
of which may, moreover, be doubted. Here it is possible to

SIMMEL'S PHILOSOPHY OF MONEY 59

draw a conclusion from the value of money to the value of the
purchase. That a woman becomes valuable because a price has
been paid for her is only a case of the psychologically general
projection of value we have spoken of above. Examples of this
from ethnology are easily to be found; a good analogy from
daily life is the fact that children who have given most trouble
to their parents are generally most loved. The changes in the
organization of economics, the formation of the family, alters the
position of women ; the economic value of women loses its origi-
nal character ; in the eyes of superficial observers she becomes a
burden, as she does not earn anything. This is the motive for
the dowry, the spreading of which is possible only in a time which
considers money to be the natural means of exchange, as only
money can give woman the desired economic security. The
price which was formerly paid for the productive power of
woman is now replaced by the dowry in money given as a
compensation for the non-working woman and at the same time
as a security for herself.

A most delicate and subtle treatment has been devoted to
the part that money plays in prostitution. Money alone — which
in itself is akin to prostitution — can enter into the only momen-
tary relation of two people which leaves no trace behind. " By
giving money we have withdrawn ourselves more completely
from the relation, have done with it more radically than by
giving any other object to which, by its quality, its choice, or its
use, can easily cling a greater part of the giving personality."
"For a relation between men which is based on permanency and
inner truth — as the real alliance of love, however short a time
it may eventually last — money can never be an adequate
medium, whereas money is objectively as well as symbolically
the most perfect equivalent to any purchasable enjoyment."
Prostitution as the typical case in which men consider each
other merely as a means must have some relation to money, as
the absolute means. " Prostitution becomes dishonoring because
the gift of a woman's whole being, which ought only to be paid by
the absolute devotion of a man, is felt to be sufficiently rewarded
by money, this most neutral and impersonal of objects." Again

60 THE AMERICAN JOURNAL OF SOCIOLOGY

we meet with the change from quantity to quality if we see that
the actress of whom everybody knows that she is the mistress of
a millionaire is received in society, whereas the common prosti-
tute who is perhaps a much nobler character, is banished to the
street. Akin to prostitution is the marriage of interest, in which
the purchased wife is always more to be pitied than the pur-
chased husband, because she enters into matrimony with a
greater part of herself. Theoretically, Simmel is perfectly right
if he considers the marriage advertisement as a means to ration-
alize life and so facilitate the meeting of differentiated people,
which is otherwise left to chance. Practically he has to admit
that only the pecuniary circumstances can be half-way clearly
described, whereas outward appearance, character, etc., lie
beyond any possibility of description. Two lamentable sides
which the growing importance of money has possessed have
also been masterfully represented by Simmel : corruption, which
can be much more easily — because more secretly — accom-
plished by money, and the decay of gentility, which is also
deplored by Nietzsche. The exchangeability of things, the
possibility of selling them at any moment, means a lowering of
the standard. It serves to lay particular stress on the quantita-
tive character — a fact repellent to all noble-thinking individuals,
who never ask after the " how much."

The relation of money to human values, the attempt to find
the primitive value to which everything might be reduced even-
tually is reorganized in labor, the most common possibility of
reduction. The theory 1 which makes labor the creator of values
is philosophically the most interesting of all theories of value,
because there is not one side of human personality which could
not be changed into labor, so that it might well be the common
equivalent to all personal values. A difficulty is introduced by
mental labor, which, as it does not raise the cost of the product,
seems to leave the formation of value to muscular labor only.
With great subtlety the arguments and counter-arguments are

% Vide Adam Smith, Wealth of Nations, Vol. I, p. 5; Ricardo, Principles of
Political Economy, Vols. I and XX; Morse, Kapital, passim; Rodbertus, Zur
Erkenntnis unserer staatswirtschaftlichen Zustande, passim; Sociale Brief e, passim;
Henry George, Progress and Poverty.

SIM MEL'S PHILOSOPHY OF MONEY 6 1

weighed ; only a man of Simmel's sharp intellect was able to see
all the objections that could be raised. The reduction of men-
tal to physical labor is investigated. The hypothesis of inheri-
tance, the possibility of a relation between the standard of life,
and the quality of the productions are discussed. It seems
justifiable that a differentiated intellect should be fed on differ-
entiated food; in this respect it is true that "man is what he
eats."

This reduction of all work to muscular power seems plebeian
and crude, but even here Simmel sees a way out of the difficulty.
Perhaps the value of muscular labor does not lie in the physical
effort, but in the physical energy that enables us to take work
upon us, so that all work may be reduced to a physical effort
which a future generation may perhaps be able to measure.
This interesting discussion is not quite final, however, for it can-
not be denied that labor may be worthless, foolish, superfluous,
so that an external moment — i. e., utility — is added as a deter-
minating factor, and the quantity of labor in itself is not a suffi-
cient basis of value. In supplement to Simmel one might call
attention to the fact that a clock, one wheel of which is wanting,
cannot stand in the same relation to the perfect clock as that in
which the quantities of labor applied to both stand to each other.
Thus we recognize that labor-money — which, strange to say,
even non-socialists * defend — is to be rejected as lost equivalent,
and our money, which certainly often violates personal values,
is to be preferred, because its mere quantitative character allows
the unity of value to be changed into multiplicity.

In the last chapter, "The Style of Life," 2 we breathe the
mountain air of modern philosophy. Money and culture, the
whole rhythm of modern life, the style in which the different ten-
dencies of our time have become united as a whole ! The pro-
longation of the succession of human purposes causes the cessa-
tion of emotional impulsive actions, the world gradually becomes
a problem that intellect has to cope with. The enhancement of

1 For instance, Schaffle.

2 Vide Sombart, Der mcderne Kafitalismus, 1902, Vol. I, pp. 378 ff.; Vol. II, pp.
68 ff., passim.

62 THE AMERICAN JOURNAL OF SOCIOLOGY

intellect is the rationalization of the world. Between money and
intellect there are closer relations than mere analogies. Intel-
lect, being only a reflex of reality, equals money in its want of
interest. Both are standing beyond any personal relation to
their object. Intellectualism and the rule of money impress
upon our time the mark of calculation and reckoning, in science
strongly influenced by the growing importance of the exact
sciences ; but equally in trade in the struggle for existence, in its
dependence on the totality of economic life.

The reverse of this — the appearance of stronger emotions,
romantic ideals, longings after a more sentimental conception of
things — is not to be considered an argument, but rather a reac-
tion against this phenomenon. Money and intellect create the
highest objectivation of the style of life ; money and intellect
are exchangeable without residue. Intellect can be exchanged
into thought, mediated by language and writing. Money means
the exchange of everything as far as it belongs to economics.
Intellect is not individual, but different only in depth ; the same
we can say of money, the quality of which is its quantity. Here
we have rich and nearly inexhaustible sources for the knowledge
of the development since the beginning importance of money
which first gave us the possibility of exactness in life.

The second part of the chapter treats of the contrast between
objective and subjective culture. Objective culture is a great
deal more than what Hegel means by "objective spirit." We
have become ever so much richer in objective goods of science,
technical science, and art ; our language is composed of a much
greater vocabulary, and yet it seems as if the individual had to
give up its possessions that they might enter into objective cul-
ture. This becomes clear by an explanation by which Simmel
descends into the deepest depths of the soul. Plato has called
our knowledge a recollection. Simmel approaches the meaning
of this interpretation when he says : " We feel our thinking to
be the fulfilment of an ideal model ;" and farther on : " Percep-
tion is to us nothing else than the realization of those concep-
tions within our consciousness, which seems to have waited for
us there." We feel our knowledge to be a necessity, because
for every intellect truth is preformed.

SIMMEL'S PHILOSOPHY OF MONEY 63

Objective culture as the objectivation of intellect thus
becomes a historical fact. Here we find what is dubious in
biology, an inheritance of acquired qualities. The style of life
is determined only by the relation to subjective and objective
culture. The greater the division of labor, the more compli-
cated becomes the relation for the subject. Goods are more and
more separated from their producer; factory goods replace
goods made to order. Because labor is subservient to an object-
ive purpose, it stands in a more objective relation even to the
worker. Thus we get the purely objective relation that every-
body works for everybody else : the upper for the lower classes,
and vice versa, the celebrated chemist in his laboratory for the
peasant's wife who buys the colored neckerchief, and the work-
ing man for everybody who is a consumer of the goods he pro-
duces.

Fashion 1 is a symbol of the variety of our style of life, of
the objectivity with which we all of us look upon our daily sur-
roundings to which we are not bound by any of those personal
feelings so deeply rooted in more conservative antiquity. Our
surroundings are indifferent to us because they are exchangeable
for money. Our style of life through money becomes more and
more anti-individual. But Simmel also sees the tendencies
going in an opposite direction by surpassing the objective
moment, when, for instance, we replace inherited and dogmatic
laws by more individual ones, or when the subjective faculties
of woman call for a higher satisfaction because the objective
character of matrimony and domestic economy has outgrown
itself and leaves her dissatisfied. The parts that money and
division of labor have played in economics are closely related.
What we gain by the ascendency of objective intellect, we lose
in soul and heart. But even here a last contrast remains ; the
more money becomes a cause of indifferentism and the more
everything becomes measurable by mammon, the more passion-
ately the doors of that region are guarded which still remains the
stronghold of our soul and where we still feel it our duty to
oppose all mercenariness.

1 Vide Sombart, loc. cit., Vol. II, p. 327.

64 THE AMERICAN JOURNAL OF SOCIOLOGY

Besides the contrast between subject and object there is that
between our ego and the external world. The last part of the
chapter treats of the distance between us and things, men, ideas,
and relations. Very cleverly Simmel explains how it comes to
pass that the ideas of space deducted from the external world
become the standard for our ego. Here he speaks of the part
distance plays in art, of our modern tendency to prolong the
distance between us and things. The modern mind is strangely
fascinated by everything distant. We do not prefer what is
clear, perspicuous, and self-evident, but what is symbolic, apho-
ristic, sketchy. We understand what Voltaire meant by saying:
" Pour £tre ennuyeux il faut tout dire." We have a predilection
for distant styles of art, for enigmatic symbols. We want to
enjoy everything from a distance. Yes, Simmel, who himself
follows this doctrine, sees the greatest delicacy of literary style,
not in grasping things tightly, but in only grazing them. Mod-
ern philosophy does not want to come as close up to things as
materialism did; things are separated by the medium of the
soul ; the principle of utility which made cause and effect draw
near to each other, has had to give way to a greater separation
of the two. The interpolation of new media into the succession
of purposes removes the nearest to a distance. Hand in hand
with this tendency toward a widening of distance goes an oppo-
site one. Technical science as the overcomer of space and time
brings distant things into relation, so that the result is a widen-
ing of the distance with regard to our inner life, a shortening of
the distance with regard to our outward life.

Money plays a most important part within both tendencies.
It makes it possible at the same time to loosen the bonds of
primitive dependence within the family and to put us into rela-
tion with a great number of people. Credit, which, as is often
maintained, does not stand beyond the economic stage charac-
terized by money, but rather is essential to it, is here psycho-
logically explained. It creates distances and overcomes them.
Credit itself is nothing else than a phenomenon of the whole
style of our modern life. Which of us is not struck by the truth
of the following words: "Through modern time, and especially

SIMMEL'S PHILOSOPHY OF MONEY 65

through these last years, there goes a feeling of tension, expecta-
tion, and unsolved pressure — as if the main point, the gist, the
real sense and center of life and things, was still to come." There
is a general tendency for the means to overgrow the ends ; an
interesting example of this is the army: really nothing but an
accumulation of latent energy, a means. in case of war, which at
the same time is to be avoided by the existence of standing
armies, it has become a purpose in itself. The overgrowth of
means over ends finds its culmination in the power outward life
has over the life of our soul. It is not a scientific, but a mytho-
logically childish thought, if we speak of an overcoming of, or a
power over, nature ; as in nature there is no will opposed to ours.
The machine, of which Ruskin has said that it is like a demon,
who first makes men rich and happy, but afterwards wrenches
their soul from them, shows us the relation of man to the
outward world. "The sentence that we rule over nature by
serving it has the awful reverse that we serve it by ruling
over it." We become slaves of the process of production, of
the products, their qualities and of everything surrounding us. 1
The contest between ends and means always strives after an
adjustment, but "perhaps it is not at all the meaning of life
ever to realize the permanency of a reconciled state." This is
the real source of the restlessness of modern men, that restless-
ness which has driven them from socialism to Nietzsche, from
Hegel to Schopenhauer, from Bocklin to impressionism. As the
modus of means money must play a part in this process of life,
and, moreover, a double one — the part as a means and the part
as an end.

The second determination of style is of a temporary kind ; it
has its foundation in rhythm, 2 as a temporary phenomenon. Man
early rose above rhythm. He is no more bound to a definite
pairing-time, remainders of which are still to be found among
uncultivated nations. The dependence of the satisfaction of our
needs upon the seasons gradually lessens. Civilization strives to
overcome everything periodically rhythmical. Opposed to this

'Vide ONCKEN, Geschichte der Nationalokonomie, p. 44.

'Vide Karl Bucher, Arbeit und Rhythmus, passim, chaps, i, ii, ix ff.

66 THE AMERICAN JOURNAL OF SOCIOLOGY

development is the fact that rhythm as the symmetry of time,
and symmetry as the rhythm of space — as first proofs of a
rationalization of things which spreads an enlightening system
over their casual connection — are tendencies of beginning cul-
ture. Symmetry and rhythm are the first to create a possibility
for surveying what was heretofore unconnected. They are the
symptoms of a medium height of culture. But the style of life
must also outgrow this form, for periodicity and systematics are
a violation of real life. Their power is broken before the highest
manifestations of science, politics, and art. The higher form
does justice to the individuality of things, instead of forcing it
into a system. Modern factory work again approximates to the
symmetrical rhythmical form; but it is no longer the old rhythm
of work as it is characteristic of primitive man and which is based
on physiological-psychological energy, 1 but a subordination
under the totally different objective development of machine
products, which adapts itself to the economic principle and, as
we have seen above, leaves room for individual liberty. The
highest form of labor — mental work — is of a specifically indi-
vidualistic-spontaneous character.

Money also goes through the same stages of development.
In the middle stage it is rhythmically bound by fairs and mar-
kets, but this is superseded by a more continuous form. Sys-
tematization is overcome by individuality. But because money
is fluent and wanting in power and character, it is able to adapt
itself even to systematics. It has been subservient to liberalism ;
it becomes a means of despotism, and has had the faculty to
adapt itself to socialism, and even to prepare its way.

But there are more things in life determined by money.
Money determines the movement of our style of life ; an increase
or a decrease of money affects the economic-psychic pro-
cesses; money increases emotions. It is not by accident that
only since money became the general means of exchange, clocks
begin to strike the quarters ; that only about this time watches
become a necessity, for time only now becomes of importance;
time becomes money. Money is in a constant flow ; it flows into

1 Vide BuCHER, Arbeit und Rhythmus.

SIMMEL'S PHILOSOPHY OF MONEY 67

the centers of economic life, into the exchange, where life is in
quickest movement ; it flows into the smallest form, into the check
which makes it possible to transport great sums quickly from
place to place. Money is round and wants to be rolling from
hand to hand, from place to place, as the symbol of ever-flowing,
never-resting life. Money has to be given away in order to be
money. Only in movement it fulfils its function, it finds its
sense. It becomes an equivalent to all things as far as they are
economic, soaring above them, like a Platonic idea, like natural
laws above the phenomena of nature. It becomes the last
symbol for the movement of the world ; though being merely
the instrument of a movement, it becomes the shape into which
all things have to enter, if they want to measure each other's
economic value. While as a single phenomenon it is the most
transient thing of the outward, practical world, by its meaning
it becomes the most constant of all ; its ideal sense, like that of
law, is to give everything its measure. The last thing Simmel's
book teaches us is the constant movement of the world, the
relational character of life. The philosophic meaning of money
is " that within the practical world it is the most definite incorpo-
ration, the most evident realization of the general formula that
things are determined by each other and that the mutuality of
their relations determines their being and their being as they
are."

Simmel's Philosophy of Money does not belong to any special
branch of science, and therefore to all ; this the competent repre-
sentatives of the sciences in question will never pardon him, and
yet they all of them can learn a great deal from him, the lawyer
as well as the economist, the aestheticist as well as the historian.
The man who wrote this book had to be more than a small prince
over a narrow province of science ; he had to be absolute master
over the wide realm of human thought. And yet a tragic strain
goes through the book. It means burdening every thought with the
fate of the eternal Jew, if the author treats every last thought as
if it was the one before the last. The eternal restlessness, the
longing after ever deeper knowledge and insight, is a tragic fate
for him who is seeking after truth. This trait which reveals

68 THE AMERICAN JOURNAL OF SOCIOLOGY

itself also by the most individual language of the book, leaves a
feeling of restlessness behind. Simmel's language is rich in
analogies, and it cannot be denied that analogy is a justified, even
an important, medium of science. But it seems to me that an
intellect in which the tendency to analogies and similarities is so
strong as in Simmel's is easily led to overrate their argumentative
power. If Schmoller blames Simmel for not excluding credit
from his treatment- of monetary phenomena, it seems to me that
it is impossible to separate money from credit, yea that the true
meaning of money only becomes evident by credit. Money has
not yet reached the highest stage of development; Simmel
wanted to show the tendency in which it is going to develop.
But that regards only one part, and not even the most import-
ant one, of his book.

Whoever refuses to accept Simmel's rationalistic interpreta-
tion of being must refuse to accept this book ; whoever does not
will have hours of pure enjoyment and infinite instruction in
reading it. It is not of importance whether this book has found
a solution for all the problems it has touched, but the fact that
it gives an infinitely deep psychological interpretation of life
makes it valuable for all time. It might be said of it what
Simmel himself wrote on a different occasion. Only the narrow
pride of|a scientific bureaucracy can refuse to accept the instal-
ment of knowledge which is presented here in the form of
artistic intuition. " Simmel himself is distinguished by what he
has praised in Nietzsche, by the subtlety of feeling, the depth of
causal analytics, the exactness of expression, the boldness of
his attempts*to express the undertones and intimacies of the soul,
which no one before ever dared approach. The circle of those
for whom he has written will unfortunately be small, and the
Philosophy of Money ought to be introduced by the words with
which Henry Beyle ends one of his works : " To the happy few."

S. P. Altmann.
Berlin, Germany.